Contrasting with the consensus view, the analysts believe the era of one-way yuan depreciation has ended and expect the yuan to see two-way volatility in 2017, forecasting the currency to finish the year without depreciation.

The global US dollar index fell to 100.92 from the previous close of 100.95.

The offshore yuan was trading 0.27 per cent stronger than the onshore spot at 6.8478 per US dollar.

Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 7.0865, 2.99 per cent weaker than the midpoint.